Robinhood takes stakes in Crypto.com, OG.com in prediction markets deal

Robinhood has acquired equity stakes in Crypto.com and its newly established prediction market platform OG.com as part of a multi-year agreement. This deal allows Robinhood to utilize OG.com's CFTC-regulated infrastructure for event contracts. The agreement came less than two months after Crypto.com spun off OG.com, which initially valued the company at $5 billion.

Robinhood will route retail event contracts through OG.com's CFTC-regulated derivatives exchange and clearinghouse, starting this Tuesday for eligible US customers. The brokerage received initial equity stakes in both Crypto.com and OG.com, with the valuation based on an earlier Citadel Securities investment in the platforms. The deal follows rumors that Robinhood had been in talks with Crypto.com to expand its prediction markets offering.

OG.com plans to operate independently from Crypto.com and has ambitions to expand its offerings beyond prediction markets, including futures and perpetual contracts. Prediction market revenue for Robinhood reached $156 million in the second quarter, more than ten times its revenue from a year earlier and surpassing $129 million from equities and $100 million from crypto.

While prediction markets have faced legal challenges from US states, with a recent Nevada judge extending a ban on Kalshi's event contracts without a gaming license, New Jersey has also petitioned the US Supreme Court to clarify the jurisdictional dispute surrounding sports contracts on CFTC-regulated prediction markets.